Kenya’s B2B e-commerce food distribution platform Twiga has laid off 211 of its full-time employees following restructuring that has eliminated the company’s in-house sales team.
The laid-off staff make up 21% of the over 1,000 employees mainly in Kenya, where it links farmers or agricultural producers and fast-moving consumer goods manufactures to retailers.
The agritech’s CEO and co-founder Peter Njonjo told TechCrunch that the laid-off trade development representatives were given the option of working for the company as independent agents with pay based on the customers they acquire and sales they make.
The representatives signed up vendors and were in charge of customer relations, gathering market intelligence and promoting products to clients. In the current proposition, the agents will carry out similar duties.
Reports also state that Twiga has limited its staff travel allowances as part of its cost-cutting measures.
“Twiga recently launched a new optimized sales agents’ program … where current Trade Development Representatives (TDRs) will transition from permanent employees into independent agents on a 100% commission basis,” said Twiga in response to a TechCrunch inquiry, adding that the transition of the TDRs was made in line with labor laws and that impacted employees were granted the first right of refusal to transition to the new model.
The company says it plans to create 1,000 opportunities through the agent model by the end of next year’s first quarter.
“This transition creates an opportunity for entrepreneurship open to former sales agents and the general public. The benefit of this transition is that it allows for higher earnings based on the effort and enterprise of the agent. This model has worked with other businesses like insurance and banking that have transitioned fully into Independent Agents in Kenya.”
Twiga, co-founded by Njonjo and Grant Brooke in 2014, joins the growing list of startups in Africa and across the globe downsizing amid a slowdown in VC funding, which has made capital for operations and growth hard to access.
The changes come exactly a year after Twiga raised $50 million in series C round to scale in Kenya and expand to neighboring countries. The round was led by Paris- and Nairobi-based family office and private equity firm Creadev as TLcom Capital, IFC Ventures, DOB Equity and Goldman Sachs’ spinoff Juven made follow-on investments.
They also recently launched Twiga Fresh, an addition to its private label through which it will farm and distribute its own agricultural produce to traders and to deal with traceability challenges, stock outs and price volatility — which have made it hard for the company to deliver on its promise of affordability and food security.